Tokyo shares outlook: Easier on Yahoo profit-warning; downside seen firm

TOKYO (AFX-ASIA) - Share prices are expected to open easier on renewed earnings concerns over internet stocks following the profit-warning overnight from Yahoo!, dealers said. Yahoo! shares fell sharply in after-hours trading after the company said that first quarter profits will fall well short of expectations and that it is looking for a new chief executive officer. Followingthe announcement, NASDAQ 100 futures were down about 3.0 points and investors will be watching closely to see how the market reacts to the Yahoo! news, which will put the spotlight on Yahoo Japanand Softbank. The market may also suffer from growing caution over the impact of the special quotation for the March futures and options contracts tomorrow, dealers said. There are some concerns that many futures traders may not roll-over their positions into June so as to minimize their exposure to the market. Yesterday, the Nikkei 225 index closed up36.15 points at 12,723.89. In Chicago overnight, the Nikkei March futures contract finished at 12,720, unchanged from its closing level on the OsakaSecurities Exchange. Despite the negative leads, the market is expected to see firm downside support thanks partly to a continued strong performance on Wall Street, dealers said. Growing expectations for a pick-up in the U.S. in the second half will also reduce the downside risk to the Japanese economy, making it easier for local investors to invest some funds in the equity market, they said. Domestically, investors will get a fresh lead from the release just before the open of the market of the Ministry of Finance's quarterly survey on profits and capital spending, dealers said.

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